Chain Reactions

Get involved with schools!
I read your article about "School Days" (Q1/2008) and could not agree more about supply chain professionals visiting high schools to share what the industry offers.

I believe I have the expertise, knowledge, and wisdom to address your article from both sides. I spent 25-plus years in the distribution/warehouse business as an executive with GAF, Sharp Electronics, RB&W, and Cuisinart. I then became an entrepreneur and started a distribution organization. Later I found my calling, and for the past 17 years have been working as an administrator in the public education system in California. Southern California, especially the Ontario/Rancho Cucamonga/Fontana area where I live, is a center of distribution and warehousing activity.

CSCMP professionals need to become more proactive in talking with high schools. They can set up an information table with handouts and work with guidance counselors to tell students about the industry's products and services and provide realworld examples. CSCMP leaders can connect with kids very quickly by addressing a classroom, an assembly, a small group, even a lunch group.

Career fairs are fine, but they are usually held only once a year. Why not offer a tour of your distribution center? Supply chain leaders need to take the first step and call the high school to talk with an administrator. Ask to meet with us, to take a tour of the school, get a feel for the students, and promote CSCMP. Bring some brochure or other information that is available from CSCMP's web site. Most large high schools have career centers where you can meet kids and drop off information. School counselors are also great contacts because they advocate for students.

These are exciting times. Our children are technologically savvy and for the most part quite capable of doing a good job if they have the proper training. CSCMP leaders, get off your duffs, take the initiative, and build bridges and partnerships with schools! I am convinced you will reap many rewards and benefits.

Lou Shaup
Baldwin Park, California, USA

Ready to debate the benefits of CPFR
I've been involved in collaboration since the concept was developed in the early '90s. My colleague Robert Bruce and I strongly believed that the path to accurate forecasting and improved consumer service was through collaboration. We piloted Collaborative Forecasting and Replenishment (CFR) with Warner Lambert, which led to sales of Listerine increasing, service levels improving, and inventory decreasing. Without question this successful pilot resulted in Wal-Mart embracing collaboration as an accepted business practice. Our chief information officer at the time, Randy Mott, asked VICS to develop industry guidelines that could be implemented by the Wal-Mart vendor community.

Since that time I have gone on to multiple CPFR implementations and have been active as a member of the VICS CPFR advisory team. My book, Supply Chain Collaboration, Implementing CPFR and Other Collaboration Best Practices, has been well received and has served as a roadmap for companies that decided to collaborate with their trading partners. I've delivered numerous presentations around the world, including "How to implement CPFR in 30 days."

What I have found, shall I say, interesting is that I am not aware of any CPFR critics who have implemented CPFR. This is not to say that every CPFR effort has been successful. However, I am more than willing to debate the pros and cons of CPFR with the strongest skeptic. And I won't deal with impressions and suppositions, but with facts.

Ron Ireland
Principal
Oliver Wight Americas Inc.

Editor's Note: CPFR (Collaborative Planning, Forecasting, and Replenishment) is trademarked by the Voluntary Interindustry Commerce Solutions Association (VICS).

How to get America moving again
At UPS, we don't need statistics to tell us that our nation's transportation infrastructure is in trouble. Every day we depend on it to deliver millions of packages and freight shipments —representing 6 percent of the United States' GDP —to their destination.

But this isn't a concern just for UPS. An overstressed infrastructure creates unpredictability in supply chains and ultimately makes businesses less competitive and consumer goods more expensive. This problem will only get worse. By 2025, imports and exports will represent 37 percent of the U.S. GDP, up from 25 percent today.

Avoiding gridlock will take a concerted, integrated effort by the public and private sectors. I'd like to propose an "agenda for action" for getting America moving — some practical steps we can take to begin relieving the congestion that plagues our nation's transportation infrastructure.

1. Elevate the issue. To build a national urgency for action, both public and private sector leaders must sound the alarm. Elected officials and candidates must elevate the issue and debate solutions. Business and academic leaders should leverage high-profile forums to educate the public on the impact of worsening congestion and the threat to our economy.

2. Create a comprehensive national transportation strategy. One of the primary weaknesses with the current approach to infrastructure has been its piecemeal nature. We traditionally address bottlenecks on road, rail, sea, and sky as separate problems. Unless we manage our infrastructure as a national, integrated system, we won't eliminate capacity constraints. We'll just move them to another part of the network. We need a strategy that recognizes how different modes connect — one that directs investments precisely where they are needed to balance the demands.

What's more, we have lost our national perspective. Congressional appropriations are directed to states to fund locally popular projects rather than nationally significant priorities. We need to crosssubsidize projects across regions.

3. Support some user-based taxes and fees, but dedicate them to infrastructure investment. Experts agree that we need to invest more in infrastructure capacity, but they disagree on how to fund that capacity. UPS believes that a fair way to pay for expansion is to charge users of the infrastructure —with the caveat that all proceeds are dedicated to projects that add net new capacity. The gas tax hasn't been raised since 1993 and has been eroded by inflation. UPS supports raising —or at least indexing to inflation —the federal gas tax, as long as monies from the Highway Trust Fund are dedicated to improvements and not used as a general-fund checking account.

4. Make more efficient use of existing capacity. It will take years to add significant capacity to our infrastructure. The best thing businesses can do is manage supply chains better to make more efficient use of the existing infrastructure.

5. Leverage technology. Information technology can help us use existing infrastructure more efficiently. On our highways, federal and state authorities should accelerate the adoption of real-time traffic-monitoring systems. Technology also can help make better use of crowded airspace.

Critical to this effort is the transition of air-traffic control to a satellite-based system as part of the Federal Aviation Administration's Next Generation Air Transportation System (NextGen). The backbone of NextGen is in-flight technology called ADS-B, which lets aircraft continually broadcast position and speed. UPS has outfitted more than 100 of its airplanes with ADS-B, and we're already seeing tangible benefits in terms of route and fuel efficiency, and noise and emissions reduction. We urge the U.S. Congress to appropriate the $15 to $22 billion needed over the next 18 years to build an air-traffic-control system that must handle three times the current volume. NextGen technology can help relieve air congestion.

6. Enhance the virtual infrastructure as well as the physical infrastructure. Information is the key to moving from "just-in-case" to "just-in-time" inventory. When you wrap goods with information, you have the recipe not only for leaner supply chains but also for balancing the flow of trade with the need for security.

Goods cannot afford to be stopped in their tracks because of inefficient customs processes. Harmonizing tariffs will simplify customs paperwork and compliance, as will raising the minimum value at which imported goods must receive clearance. More companies should take the security steps necessary to qualify for classification as trusted shippers by U.S. Customs.

7. Encourage more public-private partnerships. The incredible price tag of updating and expanding our infrastructure —US $1.6 trillion, according to the American Society of Civil Engineers —means that public and private sectors must work together. We need more collaborative thinking between the public and private sectors, where ideas are exchanged, models planned, and solutions implemented.

8. Increase modal capacity. Priority should be given to investment opportunities that increase our capacity to move freight, since we depend on trucks to transport 90 percent of the products made or shipped in the United States. We need to consider adding truck-freight-only lanes to our highways.

To help railroads increase capacity, a Railroad Trust Fund based on user fees would be a good step. Federal and state agencies should also make available tax credits and low-cost loans. Other initiatives could include creating regional fast rail lines and intermodal connections, as well as adding back the rail sidings that were eliminated after deregulation and creating highspeed corridors that bypass commuter rail traffic.

Experts predict that trade growth will create capacity problems at three-quarters of U.S. ports by 2010. Port efficiency also needs upgrading. Asian ports handle 18,500 containers annually per acre while American ports average 3,900 containers.

Is gridlock inevitable? Not if we recognize the threat our infrastructure poses to America's success in the global economy. We must agree on a long-term national transportation strategy and be creative in the short term about how we make efficient use of existing capacity. It's time to get America moving again.

Scott Davis
CEO
UPS